Newbies Investing Questions

[bar1080]

"The Best Penny Stocks? There Aren't Any"

https://money.usnews.com/investing/articles/2017-03-31/looking-for-penny-stocks-to-buy-is-a-fools-errand

[bar1080]

Q. Should I buy low priced stocks, and avoid high priced ones?

Why do new investors prefer very low price stocks? The benefits of low priced stocks are an illusion.

When you look at a list of stocks, like in a newspaper, virtually all shares range in price from a few dollars to about $100. A new investor might conclude that there is a floor to stock prices of about $2.00 to $5.00 and a ceiling around $80 to $100. You'll never see $0.0001 issues in a newspaper.

So the newbie investor concludes that a $77 stock such as Microsoft is about as high as it can go. Nothing in that list tells him that most older issues would sell for many thousands of dollars if they hadn't split many times over the years.

Microsoft for example has split nine times and often traded at about $120 before splitting.

$77 is actually fairly low for MSFT. Even at its IPO price in 1987 ($22) it quickly rose to over $120 which turned out to be a bargain price.
.

[bar1080]

This should help: http://www.legalandcompliance.com/dtc-chill/

[jimmyjam918]

Q What does it mean when I look at a stocks share structure and it shows an amount listed as "held at the DTC"?

Thank you.

[bar1080]

You can't conquer it, no one can unless perhaps you're an insider and are able to buy deeply discounted shares in private placements. Even then you're dealing with the scum of the Earth. I wouldn't trust anyone involved with penny stocks.

And there's always the chance the SEC will step in and shut your stock down. SEC has been very active doing just that over the past few months. Very active.

Gotta run.

[Seskue]

I think there is definitely a sense of I can conquer this..I am not ready to try but I hope to watch and learn and in reality will invest in these penny stocks again. Right now I have one that is worthless and two that I will lose about 80% of my investments It's that thing eternal hope that it will get better plus Wogoman that makes you hold on to them

[bar1080]

If you're drawn to gambling it's best to stay miles away from all casinos including this one. Otherwise following the scams can be fun.

You can learn a lot about smart investing by observing dumb investing. When I started following penny boards about 20 years ago I was so shocked by the scams and the idiot players (most really were utter newbies in the 1990s) that I had all my money in quality stuff when the crash came in 2000. Mostly I owned index funds and bonds. Certainly no pennies.

[Seskue]

Yes I see the light and I’m out of here Might keep reading the boards tho that can be entertaining People get very heated about things ????

[bar1080]

You keep digging a bigger hole hoping to get even, right?

"Wow I’m not used to this level of deceit I tried 3 small
stocks did my research and have been stung on all of them
It’s not good welcome to this world."

Now, do you understand why pros never buy these kinds of pennies?

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=134906590

[bar1080]

Q. Are OTC stocks good investments? A. No, here's proof

The SEC recently studied the outcomes of OTC trades and found the results to be strongly NEGATIVE.

"Analysis of 1.8 million trades by over 200,000
individual investors confirms that the typical
OTC investment return is severely negative."

You can read that SEC study here: "Outcomes of Investing in OTC Stocks." DECEMBER 16, 2016
https://www.sec.gov/files/White_OutcomesOTCinvesting.pdf

[Jayell88]

How do you post a link "DD" to the board ? Thanks!

[Seskue]

It was I think Blue Chip Penny Stock newsletter the author was Frank Lincoln

[bar1080]

I can't find anything online about a Frank Lincoln stock newsletter.

[Seskue]

Thanks!!

[bar1080]

I'm a lawyer with decades of successful investing experience. My stock market money is in blue chip stocks (virtually all on the NYSE) and quality, low expense funds. Much of my money is in index funds. Buffett recommends index funds. The Vanguard ones are very good.

Understand that IHUB posters are of three general types: 1) compensated promoters; 2) unsophisticated newbies; 3) hopeless gambling addicts who will bet on anything.

There are also a few people like me, scam bashers many of whom hang out here:
https://investorshub.advfn.com/DD-Support-Board-and-Fraud-Research-Team-19670/

[Seskue]

I bought from frank Lincoln newsletter scam :( sadly I was naive

[bar1080]

How'd you happen to buy that stock? Generally the sooner you dump a scam stock the better.

[Seskue]

I got scammed on a penny stock PGSY, but I don't know what to do now. Do I sell it or hold it? I am verrrrry! new to all this and just am confused and can't seem to find anything helpful other than I got scammed!

[bar1080]

Q. Are IPO stocks good investments? A. Generally not. Here's what Warren Buffett has to say about buying IPOs.

https://www.fool.com/investing/general/2016/05/04/warren-buffett-stay-away-from-ipos.aspx

[bar1080]

What's stunning is how little interest "players" have in becoming better investors. My two Berkshire Hathaway boards (BRK) contain several simple distillations of "How Buffett Did it."

These distillations aren't my products. One is a simple 40 article from Yale.com. Some tips come verbatim from Buffett and Munger. Much of the advice -- not all -- can be applied by any newbie. I've used them to great effect. So have many prudent investors over at Seeking Alpha, MF and such.

Why no interest among IHUBers in copying Buffett? Because the essence of his method is: 1) Buy quality; 2) Stop the incessant trading; 3) Do a bit of homework.

To quote one IHUB Slobbering Penny Gambler: "Who Has Time For That." IHUBbers want a bigger bass boat or pickup truck THIS year. They crave thrills NOW! They have zero interest in becoming a billionaire if that takes decades. Many members are hardwired to be investment losers.

[2b942d]

Thanks bar1080 for the quick reply!

[Jayell88]

Q. Lets say a holding company enters in to large transaction/sale/aquisition and must provide financials for the companies they have and or may be aquiring/selling.
Would there be a gag on financials for these companies until the transaction involving them is complete? Thank you!

[bar1080]

Q&A: The effects of a property sale on Social Security.

http://asklizweston.com/qa-the-effects-of-an-property-sale-on-social-security/

[bar1080]

Pretty sure capital gains don't affect social security benefits. Retirees may get all sorts of capital gains. For example the sale of long-held real estate. Interesting question, btw.

http://www.aarp.org/work/social-security/info-02-2009/faq_social_security_earnings_limit.html

[2b942d]

Q. If I am drawing my social security, and I take capital gains on a very big investment. What will social security do?

[bar1080]

Evidence that charting doesn't work:

"Technical Analysis Drags Down Performance"

"Overall, the results from statistical tests indicate that individual investors who use technical analysis to make investment decisions are disproportionately prone to speculate on short-term stock-market trends, hold more concentrated portfolios, turn over those securities at a higher rate than people who do not use charts, and earn lower returns."

"Buffett reportedly joked about this dilemma with an audience at Vanderbilt University in 2005, "I realized that technical analysis didn't work when I turned the chart upside down and didn't get a different answer.”


https://www.forbes.com/sites/rickferri/2014/06/02/technical-analysis-drags-down-performance/#5988c0961a0c

[bar1080]

Q. What are history's Top 10 winning stocks?

A. Top 10 wealth creating stocks in order over the past 90 years:

Exxon
Apple
GE
Microsoft
IBM
Altria Group
GM
J&J
WMT
Proctor & Gamble

This is from a now-famous paper by an Arizona State University finance professor: "Do Stocks Outperform Treasury Bills?"

http://csinvesting.org/wp-content/uploads/2017/05/Bessembinder-Do-Stocks-Outperform-Treasury-Bills.pdf

[BIG BALLER]

chard charts are like weed

[wewantutopia]

Does anyone know if it is possible for the new interactive charts, powered by TradingView, to show pre and after market? Thanks!

[Crazy Money]

Stock charts show the past...

[bar1080]

Q. Where to begin stock diligence? A. From another post of mine...

"Been working with a brainy accounting undergrad who's heading toward his CPA license eventually. His Auditing class final exam required that he memorize the standard 6 paragraph opinion verbatim.

My advice for investors for 20+ years: Start your DD at the END of a report. And if the certification is non-standard, probably take a pass on the stock.

The end of an audit is the most important part which is quite contrary to the IHUB lore that the Certification is "Just Boilerplate" to be ignored."

[bar1080]

Q: Does charting work? A: I've yet to find any academic research that proves charting works. And I've tried hard to find it.

[Chartmaster]

Navigation is so slow on Ihub, I think it's because of all the banner ads running, or is there a way to navigate faster? I'm tired of watching the spinning wheel and have to walk away from the computer for several minutes sometimes just to change the web page.

[bar1080]

Q. Should I just hold, not trade? A. That can work very well with blue chips:

"BOSTON, Feb 27 (Reuters) - Equity investors pursuing a buy-and-hold strategy might want to check out a fund that hasn't made an original stock market bet in 80 years.

The Voya Corporate Leaders Trust Fund, now run by a unit of Voya Financial Inc bought equal amounts of stock in 30 major U.S. corporations in 1935 and hasn't picked a new stock since.

Some of its holdings are unchanged, including DuPont, General Electric, Procter & Gamble and Union Pacific. Others were spun off from or acquired from original components, including Berkshire Hathaway (successor to the Atchison Topeka and Santa Fe Railway); CBS (acquired by Westinghouse Electric and renamed); and Honeywell (which bought Allied Chemical and Dye). Some are just gone, including the Pennsylvania Railroad Co. and American Can. Twenty-one stocks remain in the fund.

The plan is simple, and the results have been good. Light on banks and heavy on industrials and energy, the fund has beaten 98 percent of its peers, known as large value funds, over both the past five and ten years, according to Morningstar.

https://www.yahoo.com/news/buy-hold-fund-prospers-no-220155469.html

[bar1080]

Q. Thoughts on averaging down fallen stocks? A. Personally I've never averaged down. I figure that I was wrong the first time, so why buy more. Averaging down pennies that are often scammy and floorless is asinine. Only average down quality stocks and especially if the drop is caused by market softness, not company shortcomings.

Buffett HAS occasionally averaged down, but he has a staff of hundreds of the best security analysts, lawyers and accountants to determine an investment's safety. You don't.

Buffett only buys quality large cap stocks. But even Buffett buys some bad stocks. When he thinks he's made a mistake, he unloads quickly.

[JitteryTrader]

Hey guys is it true that that market makers can SEE stop loss orders on otc? Or is it just a conspiracy theory.

Looking to use stop orders on some US otcs I've been eyeing out.

But it is possible that they could get cleaned out then the price could shoot back up right? Can anyone confirm this?
I have questrade brokerage btw.

[bar1080]

Q. What's the opposite of "To Da Moon?"

"parking attendant at a nearby garage said Murphy’s wife, Annabella Murphy, crashed their Honda Odyssey last summer but could not afford to fix it."



http://nypost.com/2017/03/27/man-leaps-to-death-from-sofitel-hotel/

[WeWillSee44]

Lingo Question: What does it mean when people refer to a stock as Copper/Silver/Gold. Obviously not in terms of industry. Is it some sort of % gain range or something?

[bar1080]

Q. Downside of trading? A. Suicides, murders. I'm aware of several trader deaths. Here Charlie Munger refers to the world's first major hedge fund long ago:

"A.W. Jones, which had a long-short model, developed the best-known hedge fund in the late 1950s and early 1960s. They were market neutral, but didn't stick with it. Something went wrong with A.W. Jones. A very high percentage of its spin-off funds bit the dust. There were suicides and people lost their fortunes and had to drive cabs."

[bar1080]

Q. Does frequent trading help performance? A. It hurts usually. As a general rule The More You Trade the More You Lose. That's based on two academic studies.

"Frequent trading

One good way to lose your shirt in the stock market is to trade very frequently. It can happen if you buy every exciting stock you read about and frequently have to sell out of some in order to buy into others. That reflects a lack of confidence, patience, and discipline -- three factors that are helpful in investing success. After all, if a stock was promising enough for you to buy shares, you should give it time to perform -- and in many cases, that can be years.

According to an academic study of frequent traders by Brad Barber and Terrance Odean, the most active traders reaped the lowest returns. Indeed, between 1992 and 2006, fully 80% of active traders lost money and "only 1% of them could be called predictably profitable."

https://www.fool.com/retirement/2016/12/28/3-ways-to-lose-all-your-money-in-the-stock-market.aspx

[bar1080]

Q. Do gaps always get filled? A. Certainly-not. This is more charting nonsense. I own several blue chip stocks such as Boeing and MMM that are more than 100 years old. These continue to rise despite many chart gaps dating back decades.

You'll never read about filling gaps in the mainline financial press (say the WSJ). Buffett never mentions filling gaps. It's more baloney peddled to stock newbies to explain why their junk stock trade failed.

[Quokkie]

It identifies areas of demand and support and market psychology
Price is not always aligned with fundamentals
The market is always right

[bar1080]

Q. Are OTC stocks good investments? A. No.
The SEC recently studied the outcomes of OTC trades and found the results to be strongly NEGATIVE.

"Analysis of 1.8 million trades by over 200,000
individual investors confirms that the typical
OTC investment return is severely negative."

You can read that SEC study here: "Outcomes of Investing in OTC Stocks." DECEMBER 16, 2016
https://www.sec.gov/files/White_OutcomesOTCinvesting.pdf

[bar1080]

Q. Weren't great stocks once penny stocks? A. No. Virtually all quality growth stocks -- such as Microsoft or Walmart -- started with IPOs usually around $15 to $25 and commenced trading on an exchange such as the NYSE or NASDAQ.

Microsoft, for example,IPO'd in 1986 at $21 a share. A year later it hit $90. MSFT often traded well over $100 a share during its early years. It never traded as a penny stock.

[bar1080]

Q. Should I buy penny stocks? A.The sorts of low priced stocks promoted online are terrible investments. Penny stocks are heavily promoted because almost no one would buy them otherwise.

New investors can learn about this poor performance by creating a model portfolio of say ten hot penny stocks and following it for a month or two. You'll almost certainly find that your model portfolio has underperformed the broad stock market.

[bar1080]

Q. Why do we constantly hear about charting? A. Because anyone can see "something" in a wiggle. Charting is easy, like reading tea leaves. Some thin pamphlets purport to teach everything you'll ever need!

Fundamental stock analysis is hard, requiring high level knowledge of accounting, business, history, markets, competition, law, taxation and vastly more. Fundamental security analysis can take decades to learn.

Charting has something for everyone. Brokers and financial writers love charts because they encourage frequent trading. Your broker will never tell you to buy a few good stocks, or an index fund, and hold them forever. That would be occupational suicide for him.

[bar1080]

Q: Does charting work? A: I've yet to find any academic research that proves charting works. And I've tried hard to find it.

[Dingo212]

Hi,

I was recently looking at a stock and saw the following columns

Bid price
Offer Price
Buys
Sells

Some of the buys columns had numbers and some of the sell columns had numbers.

My question is, what does that means?

Isn't all transactions are only buys or only sells? Because if someone is selling at a price...someone is buying at the same price for the transaction to complete and vice versa!

Why is there 2 columns and each get filled at different times? Any links to helpful articles is much appreciated!

Thanks!

[BustaTrades]

Won't happen there are maybe 3 firms that will do this. Sounds like you would be better trading distressed debt notes.

[psyshark1]

What brokers you using to trading sub level penny stocks starting from 0.0001$ per share? I could not find any reasonable offer.